Marion King Hubbert’s famous theory of “peak oil” has gained a great deal of traction in the scientific literature of various fields. Want to read up on peak oil and urban planning? Check. Peak oil and tourism? No problem, you’re not the first. Peak oil and public health? Where to even begin? There have been articles on the peak oil phenomenon in publications such as the International Journal of Child Rights; Behaviour and Social Issues; and Physica: Statistical Mechanics and Its Applications.

Curiously, however, there is one field whose literature is a tad light on serious discussions of peak oil: economics.

There is a simple explanation for that. Hubbert’s theory has economic implications, but no economic content per se. In his famous 1956 paper, Hubbert, a Shell geologist who joked about growing up in “the only part of Texas where there isn’t any oil,” argued that a non-renewable resource in any particular region tends to be exhausted according to a predictable bell-shaped curve. There is an exponential ramp-up, reaching a rounded peak, like a roller coaster, and then a symmetrical, equally rapid drop-off to zero. Prices didn’t appear anywhere in Hubbert’s equations. Their logic was supposed to work regardless of changing incentives or human innovations.

And, in fact, the logic did seem to work. Based on his estimate of the total amount of U.S. crude oil already used up and the amount he thought was remaining, Hubbert figured that oil discovery would soon become much more difficult, and that the domestic production peak would arrive sometime between “about 1965” and “about 1970.” Peak oil fans who talk about Hubbert’s theory never mention the wiggle room in his forecast, and even critics don’t seem to be aware of it.

They also don’t mention that it was predicated on a total estimate of U.S. oil reserves, including those already extracted, as being somewhere between 150 billion and 200 billion barrels. Hubbert preferred the lower figure—which, if it had been accurate, would have seen the last teacup of oil solemnly drawn from the last working American oil well in the year 1987.

But U.S. oil production did, in fact, peak in 1970 at 3.5 billion barrels; and since then, it has, in fact, mostly declined at about the same rate it initially grew. The curve, until recently, looked enough like the one Hubbert drew to provide an impressive suggestion of theoretical power. That has spawned a veritable library of pessimism, with figures like Gwynne Dyer and Jeff Rubin warning that the world, too, counts as a “region.” Once global peak production is passed, they argue, that is the signal that there is about as much oil left to be extracted as we have already taken out.

And the decline is inherently terminal—monotonically decreasing, a mathematician would say. Production can never again rebound. The world will be left with a growing population battling over an ever-dwindling resource that is the irreplaceable key to its economy. Cue global war, mass starvation, genocide, etc.

So should we all be investing in riverfront land and ammo and developing a taste for squirrel meat? Thus far, attempts by Hubbert’s followers to imitate the master and project the world oil peak have met with the same repeated ruin as kooks’ predictions of the Rapture. Their response, more or less, is always, “Aha, but we have to be right eventually!”

Yet even now U.S. oil production is enjoying a rebound of the sort that peak oil theory characterizes as impossible. Horizontal drilling and hydraulic fracking technologies are propagating throughout the country, rehabilitating old oil fields and opening up the Bakken Formation in Montana and South Dakota. After Hubbert’s 1970 peak, oil production continued to dwindle, with the opening up of Prudhoe Bay in Alaska delivering an upward blip in the ’80s. It reached a new postwar low of 1.83 billion barrels in 2008—but then picked up. Through July, according to the U.S. Energy Information Administration, the country was on pace to produce 2.33 billion barrels in 2012.

That is already an increase of 27 per cent from what may be remembered as the Trough of 2008—with fracking still barely off the ground in oil-producing areas like California’s Monterey Shale. In short, “peak oil” has turned upside-down. That is awkward for those who insist that the descent in production, once the Hubbert oil peak has passed, must be irreversible, rapid, and accompanied by pervasive social and economic chaos. The history in Canada is perhaps equally awkward: Canadian oil production still has not peaked, as the “unconventional” tar sands and the products of fracking took over from conventional oil with a smooth, easy gradualness that didn’t factor into the catastrophists’ plans at all.

The North American oil and gas business is still coming to grips with the possibility of an Indian summer. Estimates of technically recoverable natural gas in the U.S. were in the order of a quadrillion cubic feet in 2003 and 2004. Today, thanks to fracking, the best guesses range from twice that to 3½ times. In 2000, Canada and the U.S. were readying infrastructure for massive imports of liquid natural gas (LNG); now there are hopes of LNG export business. Meanwhile, the Bakken play has delivered a proof-of-concept for billions of barrels of “tight oil” that could equal almost half the remaining onshore conventional supply.

In short, the immediate North American energy future is likely to look a lot like the past: reports of the death of the SUV, commercial aviation and the suburbs were exaggerated. Moreover, the environmental freight is being paid. As environmental writer Bjorn Lomborg recently pointed out in Slate, American utility companies have executed a massive switch from coal to natural gas, reducing total national carbon dioxide emissions by at least 400 megatons a year—“about twice the total effect of the Kyoto Protocol . . . in the rest of the world.” Per-capita CO2 is down to Eisenhower-administration levels.

As the U.S. defies oil-patch decline, the prestige of global peak oil theory must inevitably evaporate. Fracking has, as yet, barely gotten a toehold abroad; it faces high regulatory hurdles and exaggerated fears in many places. But no one really believes that China, to take only the most obvious example, will let itself be influenced by a few low-budget documentaries. The new talk of increasing American energy self-sufficiency sets a much more powerful example, as do the environmental numbers. China is just beginning to apply Western technology to its large reserves of shale gas and shale oil.

Academic economists never did buy into peak oil. It is hard to get them to accept a model of resource extraction that doesn’t give at least an implicit role to price signals. The University of Calgary’s John Boyce is one of the few economists who has put the Hubbert model to serious statistical tests. They are fairly obvious ones that, if peak oil had been taken more seriously by his profession, would have been performed 40 years ago. Hubbert’s curve turns out to be not much use as a source of predictive power—the ultimate test of any scientific hypothesis. It is not only that Hubbert’s own 1956 estimate of remaining U.S. oil was much too low—this turns out to be a general feature of his oil-extraction model, no matter where you look in the past and no matter what region you study.

It is also true no matter what non-renewable resource you happen to look at—Hubbert’s “law” failed for coal, which used to be the global economy’s “irreplaceable” fossil fuel, and it fails for other minerals. Boyce even cheekily applied “Hubbert peak” logic to agricultural production, which has no cumulative upper bound at all, and showed that a motivated catastrophist could, on the basis of world statistics, use the model to generate a bogus prediction of imminent “peak food.”

Part of the reason the peak oil hypothesis keeps hanging around, Boyce showed, is that Hubbert’s doomsaying successors operate with a pretty movable set of goalposts. When estimates of future oil reserves increase, theorists like Colin Campbell are quick to claim jiggery-pokery on the part of OPEC. (It is not that OPEC is above that sort of thing, and individual exporters have been caught red-handed fudging reserve estimates, but in general it is in the interests of folks sitting on oil for everyone to believe that it is scarce.) Less justifiable is the tendency to simply discard inconvenient data from the distant past that would throw off the model. Hubbert’s estimate of the U.S. peak was calculated using production figures beginning only in 1930, though he had access to a longer series, and later theorists have repeated the practice.

What is most comical about the popular peak oil phenomenon is that Hubbert was much more of a natural optimist than his acolytes. You would never know, seeing the uses to which his theory is applied, that his grand-scale vision of the human energy future originally had a happy ending. In the 1956 paper, he discussed both shale oil and the Canadian oil sands, showing that he understood their scale and promise. Moreover, he noted that “by means of present production techniques, only about a third of the oil underground is being recovered . . . secondary recovery techniques are gradually being improved so that ultimately a somewhat larger . . . fraction of the oil underground should be extracted than is now the case.” That is a clumsy but otherwise excellent description of fracking.

But all of that, Hubbert observed, is small potatoes. The title of the paper he delivered, which is something else his fans often skip over, was “Nuclear Energy and the Fossil Fuels.” Hubbert gave his talk in March; the world’s first commercial nuclear reactor, Calder Hall, would not be switched on by Queen Elizabeth II until October. But the geologist’s discussion of uranium and thorium was well-informed, and even at that early date it was clear “that there exist within minable depths in the United States rocks with uranium contents . . . whose total energy content is probably several hundred times that of all the fossil fuels combined.” On the scale of millennia, Hubbert said, “the discovery, exploitation, and exhaustion of the fossil fuels will be seen to be but an ephemeral event.”

In the short term, however, the hydrocarbon barons will still count. Wind power in its vanguard country, Germany, is confirming many of the problems that fossil-fuel types foresaw with relying upon it as a source for steady commercial-scale electrical power. Put simply, it cannot provide any such thing. Old-fashioned carbon-emitting sources must make up for periods when the weather does not co-operate, and Chancellor Angela Merkel is involved in a terrible political fight over who will cover the added costs.

The renewables revolution is unlikely to arrive until mass energy-storage technologies that could alleviate the problems of connecting solar and wind to the grid prove themselves ready for prime time. There are two kinds of systems that are broadly proven: ones that pump water uphill, turning electricity or heat into positional energy that can be liberated later by letting the water run the other way, and techniques for compressing air and storing energy underground as pressure. Unfortunately, both kinds of “battery” are landscape-dependent. Pumped-water storage requires a pair of matching reservoirs, and compressed-air storage is normally implemented in abandoned mines.

The ideal electrical “battery” for pairing with wind farms and solar facilities would be, well, a battery. Research into energy storage is not yet flying forward with the same Moore’s Law haste as computing power. Techniques for grid-level electricity storage must not only be able to contain huge quantities of energy in a space of practical size—they have to be able to release it at an acceptable power rate on demand, and to remain efficient over many cycles. The batteries being researched now are, in many cases, jumbo versions of ones you might have in your home: lead-acid, nickel-cadmium, and lithium-ion are all candidates. But the bankruptcies earlier this year of two U.S. energy-storage companies, battery manufacturer Ener1 and flywheel experimentalists Beacon Power, have left a bit of a stench in the tech investment community.

With policy-makers still ambivalent about nuclear alternatives in the wake of Japan’s Fukushima disaster, it is looking as though the world is stuck with fossil fuels for a while yet. But with the fracking revolution increasing the supply of natural gas to God-knows-how-much, the opportunity is present for industry to shift down the ladder of environmental harm from coal to methane.

For the ordinary consumer, Google’s driverless-automobile software may actually begin to change lives and cityscapes before promising new forms of energy. Driverless taxicabs—whatever their engines happen to run on—might extend some of the eco-benefits of public transit to the suburbs, minimizing the footprint of parking lots in urban cores.

A slow shift to robo-chauffeurs might not seem very glamorous compared to the wildest of peak oil fantasies: a romantic reversion to pre-industrial life, perhaps, or multi-sided atomic wars over the last of the oil fields. What seems most certain is that even those who support the intellectual peak oil fad will quietly and politely move on once its problems grow too self-evident.

It sounds like you have a fascinating new theory of Multiple-Peak Oil. But it cannot have anything to do with Hubbert’s theory, which specifies a single, symmetric peak. (And what’s this “plateau” business?) So, as I was saying: peak oil, as a concept, pretty much out the window. Thanks for playing.

Universe is right on. The bumpy plateau is fundamental to peak oil “theory” which is about as much a theory as evolution is. It is a fact that oil is finite. When the cost of extraction meets the value of the oil, the plateau meets a cliff.

Peak means nothing more than date of maximum production rate (and you have to choose your time interval for that).
For instance :
It was somewhere end 1970 beginning 1971 for the US
it was around 2000 for the North sea (UK + Norway)
It was 2005 for Mexico
Go look around below for instance :http://mazamascience.com/OilExport/
(in scientific terms peak oil is a complete banality, then it is a matter of data and time, what Hubbert did was defining a typical production model, fitting it to his data, and he was completely accurate in saying in 56, that US peak would occur around 1970).
As we are now around world peak, the bumpy plateau can be described as :
1) the economy grows, oil consumption and price as well
2) we approach the current maximum production rate
3) price rise a lot, production cannot follows, peak in price and prod
4) demand destruction (recession), consumption decrease (2009), back below current maximum production rate, price falls
5) more or less back to 1)

yt75 on October 19, 2012 at 10:48 am

It is fundamental to peak oil theory that the extraction of a non-renewable resource will have a beginning, peak and then decline.

If one incorporates economics in the equation the peak turns into a bumpy plateau while prices show extreme volatility due to supply not meeting demand.

The decline won’t be smooth either but it is coming.

UniverseWeAre on October 19, 2012 at 10:55 am

Every word you type is evidence that you never actually read Hubbert’s study.

To hear you tell it every graph in the study has a single, symmetric peak.

So either you haven’t actually read it or you’re misleading your readers. Which is it?

You’re like the creationist who concludes evolution is false because they’ve never witnessed a whale giving birth to a duck.

The “fascinating” new theory of peak oil is yours where every single production profile must look exactly the same.

It is also interesting that you respond to plain fact with emotion and rhetoric.

Yes it can as long as you recognize, which you obviously don’t, that Hubbert’s original theory has been built upon. Relying only on Hubbert’s initial work is as wrong as relying only on Darwin’s initial work to understand evolution.

Find a way for the US to produce more sweet light crude oil than it did in 1970 for any sustainable period of time and you’ve falsified it.

You aren’t up to the task. In fact, nobody on Earth is because it is impossible.

UniverseWeAre on October 19, 2012 at 10:50 am

Universe,

Thanks for your persistence, keep it up. Every single one of these paid PMO shills will be exposed for what they are, make no mistake. Every response this sycophant gives will serve as evidence to drive another nail in his propaganda-career coffin.

If Harper and his pals think they can re-write the history books, the science books, and the law books using paid liars (like this ‘journalist’) as his footmen, then he is sadly mistaken.

And to this Colby character I say the following: Beware. You are walking on a VERY thin sheet of ice. You had better have a very good lawyer and a very good escape plan when we remove your tyrant boss.

You are public enemy #1, and you WILL be exposed for it… ignore this warning at your peril.

Patriot on October 19, 2012 at 1:24 pm

Thanks for the encouragement!

I would also like to return the sentiment as well as extend it to all of the people on this board who’ve called Colby out for his deception.

I’ve read comments from a vast majority of you on many different sites/blogs and am pleased to see everybody so active and informed.

Please keep it up. You are the universe splashing cold water on its face.

In the case of both Darwin and Hubbert, a lot of the derivative work is less than inspired, and some is just plain wrong. I think Hubbert’s actual work
was very good. There will be a time when petroleum, as an economic resource, will be exhausted, and we can get a clue as to when that will be by looking at the record of past production. For me, at 80 yrs of age, that will be some time after I die, and before the Sun becomes a red giant and engulfs the Earth. Others may want greater precision.

I believe the actual statement from Hubbert is that the oil production curve closely matches the oil discovery curve, and that you could reliably predict the oil production peak by comparing production to discovery.

If you have a stake in saying peak oil is not near enough for us to panic, then you don’t need to misquote Hubbert to do so. In fact you’d make a more solid argument by pointing out the new discoveries being made and then using his theory to show how far away the peak is.

I don’t agree with your analysis. Bakken could have been produced years ago but the technology to produce it economocally was developed very recently. It is the same technology developed mainly by EOG resources that is used to produce shale gas. There will be many more discoveries made. We already know of the vast amounts of oil in Alaska and northern Canada. Production of this oil and gas is delayed only by politics.
We now know of enormous producable reserves of natural gas. Much more will be found. We are very adaptable and will easily adapt to using this fuel in transport.
We have rather crude technology (that will improve over time) to liquify coal. North American coal reserves provide centuries of supply. Many new fuel sources are out there we just haven’t found or recognized then yet. Human ingenuity has brought us a long way and will take us much farther if we keep politics and fear spreading money grubbing special interest groups out of the way.
I agree with the idea of planting a garden not for survival but as a relaxing hobby.

agreed. Citation is an inventory of what we know, not what we may know. Since the beginning of time mankind has looked around beleived the knowledge they had was all they would ever have and feared they would run out of what they required to survive and yet not only have we survived we have thrived. We could always look at what we knew and see the shortcomings. That has always limited us. We never knew what would sustain us until it appeared. I prefer to live in hope with a we can do it attitude, keeping a veiw to opportunities than to live in fear with a we are doomed attitude.

The population will decrease quite a bit but this is not an extinction event. But at best it is a population bottleneck.

The “American Dream” is doomed.

Any economy that relies on economic growth to survive is doomed unless they can convert to an exergy economy.

UniverseWeAre on October 19, 2012 at 9:53 am

Your either/or world view is telling. I “hope” to continue reducing my dependence on environmentally degrading and increasingly expensive fossil fuels (something I’ve been quite successful at), and enjoy the rest of my life watching most of you continue to struggle with your oil addictions while focusing on the “shortcomings” of alternatives. You say “…and yet not only have we survived we have thrived”. I suggest you seek a little more clarity; pay attention to taking a more accurate “inventory” (requires that you avoid confirmation bias). The signs are everywhere…

Ghung on October 19, 2012 at 10:18 am

I see lots of words but zero numbers. Let fly with the evidence, please.

Now we’re celebrating a resource like the Bakken that has less than 5 years worth of consumption locked away in reserves that will take 40 years to develop.

Before anybody comments about abundant natural gas I ask that they first calculate how many barrels of oil equivalent those reserves amount to.

Then calculate how many years that much oil would see us through given the fact that the US consumes 18,000,000 barrels per day.

Then how about you figure out how much energy is lost converting the gas to a liquid so it can be transported easily. Otherwise you’ll end up with low natural gas prices in the US while natural gas skyrockets in the UK. Wait… that’s already happening…

Don’t get me started on the Green River basin. That is a resource that is expensive to produce AND expensive to refine which means even higher costs for the refined product, gasoline.

Peak oil is all about price and rate of extraction. It’s not about how much oil is left; it’s about how much economies can afford to bring said oil to market. If people can’t afford it, it stays in the ground. It’s also about EROI (energy returned on investment). e.g.: If it takes you more energy to catch a rabbit than you get from eating the rabbit, eventually you’ll starve. Economies and their oil/energy requirements work the same way, though we bury this simple fact in economic and social complexities.

Ghung on October 19, 2012 at 10:36 am

Well said! Where does Cody get the idea that he understands economics?

UniverseWeAre on October 19, 2012 at 10:40 am

His name is Colby, dude. Not, Cody.

UniverseWeAre on October 19, 2012 at 1:06 pm

Whoops! Sorry…

UniverseWeAre on October 19, 2012 at 1:06 pm

If you had done your research before writing so many words about Peak Oil you would now know the concept of EROEI.

It is part of what you are calling “peak-oil theory” and is intimately related to prices.

If you want to limit “peak-oil theory” to a single paper written by a single man from a single point of view feel free but the people here that can think for themselves will see you for what you are.

UniverseWeAre on October 19, 2012 at 10:39 am

If global crude oil production virtually stops increasing, in response to rising oil prices, what does it tell you about supply constraints? Note that we have recently seen two doublings in annual global (Brent) crude oil prices, from $25 in 2002 to $55 in 2005, and then from $55 in 2005 to $111 in 2011.

Based on the most recent EIA annual data for global crude oil production (crude + condensate), we have seen the following, through 2011:

From 2002 to 2005, for every $10 increase in annual Brent crude oil prices, global crude oil production increased by 2,200,000 bpd.

From 2005 to 2011, for every $10 increase in annual Brent crude oil prices, global crude oil production increased by 50,000 bpd, which is 1/44th of the rate of increase per $10 per barrel increase in oil prices that we saw from 2002 to 2005.

In any case, price signals will always have an effect, both on supply and demand. However, the question is whether the supply response is incremental or material.

There is little doubt that global conventional production peaked in 2005, but because of another doubling in oil prices, we have seen a very slight increase in global crude oil production, as a result of slowly increasing unconventional production. But as I noted in my comment that still appears to be “awaiting moderation,” the real story is an ongoing decline in global net exports of oil (GNE), with the developing countries, led by China, so far at least consuming an increasing share of a declining volume of GNE.

Jeffrey Brown on October 19, 2012 at 10:45 am

Annual global crude oil production, 2002 to 2011, showing where we would have been at the 2002 to 2005 rate of increase:

But it is in Peak Cheap Oil theory.
After all, if we can’t afford to get at a resource, it is pretty well a moot point.
There might be gazillions of barrels of sweet light crude on Mars, but the cost to retrieve it would make it as if it didn’t exist at all for the purposes of human consumption.
What is more likely to happen is that there will be plenty of oil for centuries … at a price only the most elite humans on earth can afford to consume. At some price point, oil (or any other resource) is simultaneously both accessible and undepletable. It’s just that fewer and fewer people will have access to its use.

Congratulations on highlighting the most common error of assuming technology will solve everything and new oil, gas, and coal will always be there just when we need it, but also cloaking that stupidity in a wonderfully realistic pseudo-scientific bafflegab that will doubtless fool many. He is an acknowledged expert, being part of the Oilogoshpere, a fan blog for the Edmonton Oilers, and regularly writes expert opinion on the Edmonton Oilers. Mind you, the oilers he knows seems to be all hockey related, not derived from ancient biology. Still he really does a great job faking it. Perhaps he would like to take a crack at dark satire and conspiracy theory about why anyone would think because oil is now 50 times more expensive to extract, it will never get too expensive?

Cosh forgot to demonstrate that exponential growth in consumption of fossil fuel energy is nonsense. But perhaps he couldn’t figure a way to satirize accelerating use. Looking forward to his next foray into pseudoscience satire.

Good grief, you want to trust economists (who believe in fairy tails like infinite growth) over geologists on matters of hard-science (like physical limits to resources)? Please. And then as your sole reference you quote a hack like Lomborg?? Don’t get me started. Geez, journalism has taken a downturn of late.

Yes, and it’s shocking, simply shocking that the economists don’t seem to find themselves a good seat at the table where Peak Oil is being discussed. They must be in the kitchens, trying to imagine up some innovative and price-induced can openers.

Peak oil is one of the most misunderstood theories, but it a valid theory. At some point energy return on energy invested (EROEI) becomes uneconomic.

The so-called boom in unconventional oil and natural gas (the Bakken, Eagle Ford, Cardium, Utica, etc) is because there was a land grab, and they have to drill like crazy to hold the land, regardless of profitability. Shale plays, in the early phase, are cash flow negative. They require large amounts of capital till you get enough production and cash flow to reach steady and stable production out of existing cash flow without additional capital.

Once the land is held by production, oil production from non-oilsands in North America will begin its decline again, because they will begin drilling based on economics, not based on grabbing as much land as possible, and tying it up. “Steady state” economic production of shale oil will not be as large as the boosters are claiming.

There are incredible amounts of shale gas, so it may take a generation or two to reach peak natural gas, and if technology unlocks the natural gas locked in the hydrates at the bottom of the ocean, even longer.

China may not have enough water to exploit its shale gas and oil, and in some places in Europe, it is proving more difficult to crack the shale gas code.

I frequently refer to the ratio of Global Net Exports of oil (GNE*) to Chindia’s Net Imports (CNI), or
GNE/CNI. We have nine years of post-2002 annual GNE/CNI data. I have shown the declines in the ratio in three year increments, and I have shown when GNE would equal CNI for a given decline rate, i.e., when the Chindia region alone would theoretically consume 100% of Global Net Exports of oil.

2002 to 2005:

Ratio fell from 11.0 to 8.9, a rate of change of -7.1%/year. At this rate of change, the ratio would approach 1.0 around the year 2036.

2005 to 2008:

Ratio fell from 8.9 to 7.0, a rate of change of -8.0%/year. At this rate of change, the ratio would approach 1.0 around the year 2033.

2008 to 2011:

Ratio fell from 7.0 to 5.3, a rate of change of -9.2%/year. At this rate of change, the ratio would approach 1.0 around the year 2030.

As the saying goes, making predictions, especially about the future, is difficult, but note that the rate of decline in the ratio has accelerated, at least through 2011.

A key but massively overlooked consequence of this declining ratio is what I estimate is a monstrous rate of depletion in post-2005 Available Cumulative Net Exports (Available CNE), i.e., the total estimated post-2005 supply of global net exports of oil that will be available to importers other than China & India.

Based on the current data, through 2011, I estimate that globally we have already consumed, in only six years, roughly half of the total post-2005 cumulative supply of net exported oil that will be available to importers other than China & India.

The following chart shows global public debt versus the GNE/CNI ratio for 2002 to 2011:

My premise is that the oil importing OECD countries are trying to keep their economies going, in the face of declining supplies of Global Net Exports of oil, via massive deficit spending–financed by real creditors and by accommodative central banks.

Crude oil output from American soil pretty much peaked in 1970. Unless American oil output can reach beyond that original height (Something it has NOT been able to accomplish in the last 42 years) then the Hubbert curve still stands. Going over a small bump on a hill does not negate the overall shape of the hill. Nor your overall direction on it’s downward slope.

If you are “awash in oil” at all, it is because other countries are supplying you with about 2/3rds of the oil that you in fact use.

Unfalsifiable in the sense that the fundamental theorem of calculus is unfalsifiable. See, you’re right to state that Hubbert’s deduction of the peak is a mathematical tautology. (His 1956 paper does this pretty explicitly.) But when people insist on ignoring a mathematical tautology with important implications to their well being, then people like Hubbert are right to write about it.

I think I’m beginning to understand the snark. They are like soundbytes. It’s all about generating more comments and thus making the article more interesting and read by more people. He is self-trolling; a paid troll! Nice. The comments are indeed the most interesting parts of the article and it is refreshing to see that there articulate thinkers out there reading and responding to this stuff in an intelligent and informative way.

I understand the problem. But when you are 2/3rds of the way down a hill with no obvious way to get back up to the original height, I think we can safely call “peak” without too much fear of being wrong.

Mazda figure this out already and has avoided the money losing sink hole called hybrid and/or electric. They are building a new line of extra strong, extra light, ultra high efficiency cars that are affordable. A much much better deal for folks who want to be somewhat green without the ostentation of a $40,000 compact battery compartment that is far less green (battery disposal problems up coming) and only tells the world what a sucker you are. The Mazda is peppy good looking and very efficient and economical to run.

No, I do agree that it must peak sometime. The crucial claims of Hubbert’s theory are that you can identify the single peak–it’s a core claim of his supporters that he succeeded in doing so in advance–and that extraction rates must be more or less symmetrical on both sides of the peak (whatever price happens to be doing). If the theory has no predictive content, it’s just a mathematical tautology.

Actually, no. Hubbert and most authors citing him have said the opposite: that you can only identify it in hindsight, and that the ramifications of going past the Hubbert Peak unprepared are severe enough (see the Hirsch report for the gory details) that it would be wise to treat whatever estimate of the peak you have with seriousness and not dismiss it.

ocschwar on October 19, 2012 at 11:03 am

Ridiculous. The public credibility of Hubbert’s theory DEPENDS entirely on the fact that he forecast the U.S. peak successfully.

The public credibility of Hubbert’s theory depends on the public knowing math. Which of course means it’s doomed. But that is nothing to celebrate, even for you.

ocschwar on October 19, 2012 at 4:01 pm

“Hubbert and most authors citing him have said the opposite: that you can only identify it in hindsight”

If you can only identify it in hindsight, then it’s completely worthless as a predictive tool, which makes it completely worthless at telling us what will happen to oil supplies or prices in the future.

And pretty worthless as a scientific theory in general, too.

The Invisible Hand on October 28, 2012 at 12:23 am

It isn’t a “theory” but a banality, try to understand that first

yt75 on October 19, 2012 at 11:50 am

Murray Smith (AB’s agent at Can embassy in DC) and Ralph Klein justified the fire sale of oil sands leases (extremely low royalty rates and flooding the market w/o inviting say CNOOC to bid) was that if they didn’t get the shovels in the ground (and hence sunk costs), then the oil sands resource would be stranded as the world moves on to other forms of energy.

Resources Minister Joe Oliver recently made the same argument as to why all pipeline options (NSEW) should be investigated, and built ASAP so that oil sands resources are not stranded.

Aren’t they both subscribing to a form of Peak Oil theory for their political justifications? And as a result, picking winners?

Dot on October 19, 2012 at 12:03 pm

If you look at both Hubbert’s 1949 Science paper as well as his better-known 1956 paper, both the examples of real and generic production curves are strongly skewed with a steep growth stage and a longer flatter tail. It is not clear when or even why people started using symmetrical distributions to model such distributions since there are more appropriate alternatives.

It is also clear from the text and figures that Hubbert was looking at time frames of several centuries, and that he would have ascribed little predictive value to the steep initial side of a curve.

In 1949 Hubbert used prewar global estimates of one trillion barrels of conventional oil, one trillion barrels of oil in oil shale and 180 billion barrels in “Athabaska Tar Sands”. Due to the postwar boom in oil exploration, in his 1956 paper he used values approximately double the earlier ones. Assuming that these represented exploitable resources (which is inherent in the logic of a production curve), the values are not far off current ones.

Mark Shore on October 19, 2012 at 3:42 pm

“If the theory has no predictive content, it’s just a mathematical tautology.”

Thanks to the sorry state of education today, a surprising number of so-called scientists have never clued in to that obvious fact, which explains why the same scientists produce nothing but garbage. Published garbage.

s_c_f on October 19, 2012 at 6:53 pm

Hubbert doesn’t mention the word cost or price in his geological analysis.

Several other biophysical economists have mentioned price and have incorporated it easily into the concept.

100% of the posters article relies on omitting facts or any semblance of the truth and making up their own assertions.

As long as you understand this point, you will realize why he can never be wrong (in his own mind)

Peter Pottinger on November 13, 2012 at 2:40 pm

Price signals are a means by which human beings communicate with each other in a capitalist economy. And directives are a means by which human beings communicate with each other in a communist economy. Neither of them can trump physical reality. To argue otherwise is pure Lysenokoism.

CC writes: There are two kinds of systems that are broadly proven: ones that pump water uphill, turning electricity or heat into positional energy that can be liberated later by letting the water run the other way, and techniques for compressing air and storing energy underground as pressure.

I think you meant potential energy.

CC writes: Moreover, he noted that “by means of present production techniques, only about a third of the oil underground is being recovered . . . secondary recovery techniques are gradually being improved so that ultimately a somewhat larger . . . fraction of the oil underground should be extracted than is now the case.” That is a clumsy but otherwise excellent description of fracking.

Not really. Fracking has been used in conventional oil and gas production for ages. Where it is now being used in tight formations (shales) is in combination with horizontal drilling. This gives greater surface area for the hydrocarbon to flow to the wellbore through low permeability reservoirs. It is still primary production, not secondary (secondary would include waterflood – injecting water to sweep out remaining oil and r-epressuring a depleted reservoir is an example of secondary production).

Whether the graphs are 100% correct has little correlation to whether the underlying concepts are valid — and it sounds like this is the connection you’re trying to draw. It’s especially concerning when you start drawing in things like natural gas finds and saying, “See? This shows he was wrong,” when he wasn’t talking about energy supplies generally (as you admit further down in your article with his optimism about nuclear energy) but simply about oil.

Going from your article, it sounds like Hubbert basically assumed a static price/static demand model — which is why economists are not interested, and why the graph may not play out in reality like he wrote. Although judging from some of the other comments, going by your article may not be the best representation of his work. However, even if we allow for changing price and demand, it strikes that what we will see in that instance, when dealing with a finite resource with increasing demand is more or less a hill-side leading to a gradual slope up, until it simply stops.

From what I’ve seen, economists dont like graphs that stop. Perhaps another reason they don’t pay much attention to this theory.

However, I do question your wisdom on the reliance on fracking to save us. People will only take flare-ups in their water-lines so often before democracy shuts down those wells.

As I said above, what Hubbert really claimed is that the production curve of oil closely matches the discovery curve and that and that if a peak is found in the discovery curve then a peak in the production curve can be predicted with reliable accuracy.

To say Hubbert meant that he could predict peak oil off 1956 numbers is being deliberately obtuse.

If Hubbert “wasn’t talking about energy supplies generally,” that’s just one more reason to minimize his work when predicting the future of world energy. Oil doesn’t get used in a vacuum — it’s just one energy source that competes against natural gas, nuclear, hydro, geothermal, and even lesser sources like wind and solar on occasion. More of those things means less need to produce as much oil.

And even the demand side is more elastic than doomsayers like to think. As the price of oil goes up, people *do* use less of it.

Great article. It’s arguably one of the best written pieces I’ve read on the subject in a Lon while. What most peak theorists have done is to make a distinction between conventional extraction methods and new more energy intensive methods. I would have liked to see a discussion of EROEI, and a comparison between it and other energy, which most peakers reference when they talk about their doomsday scenarios! But good job.

So basically what you’re saying is that any connections or implications in your article beyond saying a 60 year old theorem hasn’t worked out perfectly are completely unintentional and should not be drawn from it.

Which means that the primary insight we can draw from this article then becomes why journalism is dying, and why you’re not working anywhere else.

1. Oil production from 1965 to 2005 increased by 2.44% per year.
From 2005 until 2011(the last datapoint with a full year counted), it increased a measly 0.4%.

2. The decrease in production growth from the average 40-year trend was over 80% in literally a few years. The rebound hasn’t happened, even with sub-2% growth in the U.S., Australia, Canada and Brazil crawling around barely higher, Europe in the ditch and India and China both growing at 4-5% real rates(China’s railway traffic growth has decreased from 9% per year in 2010 to -3% today).

3. Yet despite all this enormous economic weakness(which seriously curbs oil demand), the global OPEC basket(a combination of various oil blends from around the world into one average price) is over $110 dollars a barrel.

4. This is an increase by over 5x in just the last decade(in real, inflation-chained prices). The price has not been this high for the last 120 years except once, and that was immediatedly after the 1973 oil shock(but that was a synthetic shock, it was manmade. This isn’t).

5. So what next? Well, most likely more of the same for the next decade. A slow, grinding upwards slope. A recent IMF working paper predicted a real, inflation-chained oil price of around $180 dollars a barrel by 2020. It would be more than enough for the price to get over $140 dollars to see real economic damage.

6. A final point. In 1999 the Economist predicted $5 dollars per barrel for the oil price in the coming decade. Instead we saw a 5x increase.

These price increases should have led to higher production which never actually materialized. Oil prices since 2003 are creating a pennant pattern. You can see the price trying to find the sweet spot in the market and it looks like it is failing miserably.

When the pattern breaks it will likely break hard. The direction it goes depends on why it breaks. If war erupts it will break up. If the economy takes a nose dive, it will break down until demand or war returns.

To point # 5…

That is the best case scenario too. It assumes that all of the oil producing nations play fair with each other and nobody begins hoarding.

It also assumes the dollar remains the reserve currency which is probably a horrible assumption to make.

That’s kind of the problem isn’t it. It’s almost like the Dairy Board or even the De Beers model where the “Supply and Demand” is tweaked to the point where the real ratio doesn’t seem to have any relation to the cost we are seeing. Kind of the “Decreased demand = Increase the price to maintain an equal total profit” model.
Regarding hoarding, there are already rumours of countries doing this. Of course given that no one would admit to it even if it were true, there is no way of proving this.
Although the biggest frustration would have to be when the price at the pump started to be affected by speculation rather than actual events. I don’t remember when this started, but it’s certainly a foul when you hear about some event that could affect production and all of a sudden, gas prices jump in anticipation. Then a week later you see the news that such events were a false alarm, carry on, but the price doesn’t go down again. We are used to it, so no need. Even more amusing is how pump prices are jumping sooner and staying higher longer after long weekends. Just to make sure.
What I really don’t understand is why with the increased pinch on us working class folks and the increased concerns with ecological vs economic interests, car makers trying to cash in on the eco-boost or hybrid craze, you would think there would be a lot of special interest group pressure against going the route of increasing oil production and consumption.
Ideally we should be casting off the last primitive restraints of the early industrial age and start expanding our base of cleaner, renewable energy. But then I guess all that converting costs money. And maintaining the status quo is just so profitable for the guys that control the oil.
Never mind. I seem to have strayed from the economic point. Utopia is overrated anyway.

If you go further back to 1950, world oil production grew at an average rate of just above 7% per annum until about 1973. So, three years after US oil production peaked world oil production growth slowed considerably.

Data found on the Earth Policy Institute web site sourced from: BP, Statistical Review of World Energy June 2010 shows that, since 1973, world oil production annual growth has only been near the average for the pre 73 period for on one occasion, in 1976 when world oil production was recovering from a 5% slump between 1974 and 1975 (1976 production was only up on 1973 by 3.2%). Apart from 1976, world oil production growth only exceeded 4% in 1979, 1986 and 2004. Data from BP Statistical Review of World Energy June 2012 for 2010 and 2011 which are not included in the EPI data set, show a growth rate of 3.07% in 2010 (recovering from a 2.5% slump in 2009) and 1.3% in 2011.

a) if taxes are 0%, government revenue is 0
b) if taxes are 100%, government revenue appraches 0, as shown in dictatorships and communist countries and the fact that people will not voluntarily become slaves (and common sense)
Those two facts mean that there must be a point in between at which government revenue is maximized. Therefore the existence of the Laffer curve is indisputable. The only dispute resides around which tax rate maximizes government revenue.

I suggested it had parallels to Peak Oil, not that it wasn’t valid. It still has similar uncertainties/unknowns. I used to make the same argument on WCI concerning CIT cuts, in essence asking for proof that Canada was to the right of the peak (without specific knowledge of the existence of this curve at that time).

I’m still trying to figure out what the controversy about Peak Oil is. It seems to me the argument revolves around WHEN the peak occurs, not whether it in fact peaks.

Well, the whether/when controversy is a bit of a red herring. If in fact the peak occurs long after the human race has any need for oil, then there is no distinction, because the peak will never actually occur.

Nobody knows just how much oil is in the earth, and in fact as time progresses the human race might never run out. To assume we will hit a peak assumes (a) we will always have a need for oil (when in fact we might be living on another planet or running our own personal thorium reactors) and (b) we will never figure out a way to generate oil, it will always be considered non-renewable. Considering it had to come from somewhere in the first place, this is dubious – even today people have been able to create viruses, clones, etc, so to think we will never figure out a way to generate the substance called oil, whether artificially, by speeding up the current natural process, through chemical means, etc.

If neither (a) nor (b) is true, then there is no practical distinction between whether/when.

Additionally, if the peak does exist, but it will not occur for 10,000 years, then the distinction is somewhat dubious as well.

I believe his other point is this: for peak oil to be anything more than just an opinion, for it to be a scientific theory, then it must be falsifiable, and it must have predictive capability (which are essentially the same thing), and it fails to meet that criteria. So it is not the slightest bit a theory, it’s an opinion.

Do you believe that finding oil and gas reservoirs is at all scientific, based upon science, or is it just a divining rod exercise?

Dot on October 20, 2012 at 11:19 am

I’m sure they use scientific theories occasionally (but not usually), and tools generated by science and so on, techniques created by science, whatever.

But my lawn mower was generated by science and I don’t consider mowing the lawn to be scientific.

There are some rather sophisticated binoculars as well. But I don’t consider bird-watchers to be scientific (unless they are in the process of conducting a scientific experiment or gathering data for such an experiment).

Fisherman use some rather sophisticated radar, some incredibly sophisticated boats and equipment, etc, etc (especially when looking for rare fish in remote places). But I don’t consider fishing to be scientific.

s_c_f on October 20, 2012 at 11:22 am

hmmm, do you agree that fossil fuels are formed from decaying plant and animal matter, trapped over time, and subject to heat and pressure?

Or some other type of process?

Dot on October 20, 2012 at 11:26 am

This is heading outside my area of expertise. However, the former is the most common explanation.
Regardless, things that are formed by “natural” processes do not need to be created that way. A simple example: viruses have been created since 2002. Some people consider viruses to be living things. So they are no longer created by millions of years of evolution. Now they can be created in a lab. To assume we will never be able to chemically synthesize the molecules that comprise oil, that is absurd. Then there’s the question of whether it could be done economically, but by the time you’ve asked that question you’ve already invalidated “peak oil”, since you can create it if necessary, making it renewable.

s_c_f on October 20, 2012 at 11:36 am

OK, but if you could synthesize oil, why would you bother – seeing that it needs to be refined further? Just go directly to end product.

Thanks for the discussion. It would seem to me that, if your view/background is typical of the opponents of “Peak Oil” that may explain the difference of opinion.

Sorry, that was supposed to be nested in reply to an s_c_f post. Or was it deleted?

Anyhooo, enough from me.

Dot on October 20, 2012 at 12:34 pm

I agree that it’s unlikely anyone will synthesize oil.

As an analogy, it’s like heating with electricity and the power plant generating electricity from oil. You might as well use the original energy. So the energy used to synthesize oil would likely be better used.

But my previous points are unrelated to whether oil will be synthesized or not. I think most people who disagree with peak oil think that any possible peak is thousands of years away, because there is a non-stop and continuous process of improving technology to extract oil, and there is a vast amount of unknown and undiscovered oil. So we’ll never experience the peak because by that time better energy forms will exist, or we will reach the peak but we will not be so dependent upon oil anyway, it will be so far into the future and life will be so different from today. So there’s no need to be talking about a peak that will never have an impact or may never be reached.

s_c_f on October 20, 2012 at 2:38 pm

Ahhh, the unknown unknowns. Fanciful.

Dot on October 20, 2012 at 2:39 pm

“Wind power in its vanguard country, Germany …. ”

Windmills have been around since the time of Jesus, Earth has experienced Medieval Warm Period and Little Ice Age – windmills did sweet fa about the changing climate. If we lived in 500 BC, windmills would be new technology but since we are in 2000 AD, windmills are anachronisms oddly beloved by reactionaries and other left wing kooks.

I know auto industry and cars were first introduced with electric batteries and then we quickly moved on to internal combustion engine because batteries were dire. Electric batteries that have recently been reintroduced to vehicles, over hundred years later and God knows how many billions of $$$ in research, do not do much better than the batteries of over hundred years ago.

Fuel cell technology should be wave of future and I am not sure why everyone ignores it. Auto companies have fuel cell cars on road right now, they are zero emission and they travel significantly further than electric vehicles before they need recharge. Japanese in particular doing much research and development of fuel cell cars. Japanese also big fans of computer driven car technology – I don’t know what vehicles Google uses for driverless cars but I bet they are produced by Japanese company.

North American society will not change while left wing reactionaries are in charge of society like they are now. Reactionaries are conservative who are trying to take us backwards in time and have power to stop new technologies from developing.

“And every lease taken from the feds that wasn’t put on production has
been released back to the govt. EVERY LEASE. Except for the recent
leases that are still in primary term. A fact that comes back to the
issue of those millions of acres the companies aren’t leasing today: it’s
because most have been leased already, drilled and either were dry holes
or produced and depleted. The companies don’t want those leases for a
very good reason. When I have time I’ll try to estimate how much of the
US minerals, both private and federal, have been leased over the last
100+ YEARS. As I said earlier the US has been a major producer of FF
since the beginning of the industry. And that’s because we’ve drilled
the heck out of this country. Common sense alone should indicate there
are few significant opportunities left here.”

Bottom line: if there was economically recoverable oil there, it’s already been explored and/or leased and drilled, with very few exceptions.

If you have access to the National Post, check out Sat (today’s) Financial Post – op piece by Mark Carney about the legacy of James Coyne. But in the sidebar (I can’t find it online) there was a section called “Coyne on Coyne” where the former Governor talked about his experiences.

He talked about criticism coming from “young academic economists” complaining about his monetary policy (of fighting inflation), the young’uns advocating a more expansionist policy.

Made me chuckle, b/c this was EXACTLY what Moffatt has been writing about most recently, including this pearl: “Economy Lab: Blame Carney for high corporate cash balances”

Couldn’t find it online either and didn’t get a chance to grab a paper – sounds like a cautionary tale? :-)

JanBC on October 21, 2012 at 4:25 pm

I happened to save the portion from a temp NP digital account:
“ON THE ROLE OF CENTRAL BANKS
I felt that there was a growing trend of thought that was hostile to good monetary policy … The younger economists outside in the universities and so on, a number of them were attacking me personally and the monetary policy we were following and I felt I had to make speeches saying they were wrong…

“Peak oil”, as I’ve been at some pains to explain, is not just the mathematical truism that a graph must have some maximum. The theory makes specific predictions. When you point this out, people will arrive in dozens to say, no, actually, it doesn’t make specific predictions: there can be temporary reversals and plateaux and the decline can be long and slow instead of fast, sudden, and symmetrical. Is anyone here capable of embarrassment at all?

Yes but the curve of the US peak is fairly standard, you might have a point if the maximum was say last year, but it has been 4 decades since the US peak. Why is that?

Paladiea Rox on October 19, 2012 at 3:18 pm

Except if it’s a supply/demand curve. Two straight lines intersecting on a graph. Explains everything.

Just saved you two years and the value of a masters degree.

Dot on October 19, 2012 at 3:22 pm

“New peak!”

Again, one specific prediction the theory does NOT make is a second peak. The discussion here seems to be about the slope of the post-peak decline. I don’t see anybody saying that the theory accommodates multiple peaks.

You seem to have forgotten the cost of extraction. We would be awash in syn-crude only if we were willing to pay any price for it. That makes no sense. We are experiencing Plateau Oil and the Plateau will continue only so long as we are willing to pay over $90 per barrel.

Why do so many critics of Hubbert assume that he knew nothing of economics? Apart from being a pioneering geophysicist he spent much of his career working in the field of economic geology, both metals and fossil fuels.

Long before developing his peak oil hypothesis he made the following still-correct observations with respect to hardrock mining:

“…if other deposits do not exist, no amount of exploration will yield discoveries. The high-grade deposits will in time be exhausted, and mining operations will fall back upon ores of continuously lower grade, with physical cost of production simultaneously mounting. This process will continue for any given district until the grade of ore becomes so low and the physical cost so high that mining will cease.”

Why do so many critics of Hubbert assume that he knew nothing of economics?

Because of where a lot of the ivory tower criticism comes from. Arrogance and ignorance, mainly.

The rate of production (and hence steepness of the bell curve of production for a given reservoir) does depend implicitly upon costs/prices – in how much it costs to drill (the well spacing/density) how much to tie in (pipeline and facilities) and operate, offset by prices forecast for the grade of oil produced and rate of production/well.

Not at all, actually. Once the decision is made to exploit a field, the work done follows a very stereotyped sequence, and the resulting production is easy to characterize and remarkably insensitive to prices.

This is why exploitation/reservoir engineers constantly monitor reservoir performance once the initial development is underway – and can lead to more infill drilling, waterflood, miscible flood, installing compression, etc. etc. And further investment is weighed against updated price forecasts and costs.

To further illustrate the constant revision/re-evaluation of existing reservoirs, a summary from the US Energy Information Administration It should be noted that proved reserves are a result of a combination of current technologies and prices, and the totals are a roll-up of individual companies assessments (that they are required to report in their annual reports).

Proved reserves are those volumes of oil and natural gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Reserves estimates change from year to year as new discoveries are made, existing fields are more thoroughly appraised, existing reserves are produced, and as prices and technologies change. Discoveries include new fields, identification of new reservoirs in previously discovered fields, and extensions, which are reserve additions that result from additional drilling and exploration in previously discovered reservoirs. Within a given year, extensions typically account for a large percentage of total discoveries. While discoveries of new fields and reservoirs are important indicators of new resources, they generally comprise a small percentage of overall reserve additions on an annual basis. Revisions occur primarily when operators change their estimates of what they will be able to produce from the properties they operate using existing technology and prices.

Hubbert’s “Peak Oil” theory will be relegated to the dust bin of “failed” theories.
Hubbert’s most basic failure was underestimating total recoverable reserves. Hubbert estimated 2 trillion barrels, whereas the “real” number is likely upwards of 16 trillion barrels.
Current Peak Oil followers are a “cult” of Luddites, anticapitalists, and environmental loons.

Let’s assume your number is correct. So, aren’t you really arguing that the resource is finite, just peaks at a later time (and with growth in pop and living standards going up exponentially, the shift may not be as significant as you suggest)

Btw, Hubbert probably had not factored cartels (OPEC) into his world forecast – which would also tend to shift production/peak/steepness of production.

Let’s see. In 1956 Hubbert’s order of magnitude global estimates were 1.25 trillion barrels of conventional oil, 0.8 trillion barrels in oil sands and 1 to 2.5 trillion barrels in oil shales, for a total of 3 to 4.5 trillion barrels. These numbers are essentially indistinguishable from those in use today. So you’ve understated figures from a widely available reference, made up your own numbers, and added a few insults.

Hubbert stated 2 trillion URR here in 1974:http://www.hubbertpeak.com/hubbert/natgeog.htm
and here in 1976:http://www.youtube.com/watch?v=ImV1voi41YY
The 16 trillion comes from Saudi Aramco President Abdullah S. Jum’ah. He obviously doesn’t use the numbers you quoted. Although I’m sure you could find a number of peak oil nutjobs (with their own bogus end of the world predictions) who do.
Do a little research first before you go posting nonsense.

Cartoon figures for a television interview and a National Geographic graphic don’t supersede earlier technical publications. And numbers from a representative of a state oil firm whose reserves magically never decline are hardly convincing, as most in the business believe ME national oil reserves are grossly overstated for both economic and political reasons.

Right. Just because it came out of Hubbert’s own presentation doesn’t mean that was his position. Typical “Peak Oil” psycho response. And if OPEC reserves were as understated as Campbell claims, he wouldn’t have had to revise his peak oil predictions every year for the past 20 years.

Your second ref has Hubbert himself qualifying the graph
shown, explaining that “OPEC countries are tampering with this curve right
now, they’re actually curtailing production somewhat, and so it’s conceivable
that this peak up here might be shifted over to the back side”. See, he wasn’t
predicting, he was explaining the underlying principles. He was a clever man.

Shifted to the backside up to 10 years. That was 7 years ago, and we still are not seeing a decline. Hubbert criticized Weeks’ estimate of 1.1 trillion URR, and put forth his own estimate of 1.25 trillion in the 1956 paper. He then increased that estimate to 2 trillion URR in 1974, which is still way too low. How does constantly being wrong make you clever?

With regards to OPEC, the doomer line is that they have no spare capacity. So now they’re holding it off the market? Which is it?

And any time you claim to know what is going to happen in the future, yes that is called making predictions. The problem with Hubbert’s predictions is that he grossly underestimated URR.

stopthesocialism on October 24, 2012 at 4:39 pm

“That was 7 years ago”, i.e. around when the IEA now say we probably reached peak conventional oil. We are now, despite high prices, on an “undulating plateau”, with conventional being supplemented by expensive unconventional and hard-to-get-at oil and quasi-oil. While we wait for an absolute decline to manifest itself, world exports are falling.

What are you talking about? Hubbert was speaking about OPEC curtailing production in 1976: is that “now”?

Hubbert understood and explained peak oil. For that he should be recognized. More importantly, his insight should inform policy. Petty carping about URR estimates is irrelevant to the energy crisis the world is blindly sliding into.

Landbeyond on October 25, 2012 at 9:44 am

Did Hubbert predict an “undulating plateau” to 2035? No, he predicted oil would peak in1995, then abruptly go into decline. And yes, it is all about URR. Is URR 2 trillion or 16 trillion? With regards to the growth of alternatives, this does not mean conventional oil production cannot be increased. E.g., if you were to take all the capital and labor involved in US biofuel production, and reapplied those resources to conventional oil production, you would have increased conventional oil production. Geology is not the issue. What the growth of alternatives does disprove, is the common doomer myth put forth that there are no alternatives to conventional oil. When oil production does decline, it will be because alternatives have taken a greater share of the total, not from a lack of supply.

stopthesocialism on October 27, 2012 at 5:03 pm

‘”Did Hubbert predict an “undulating plateau” to 2035?’

No; who does? And for the final time, Hubbert did not make predictions.

“he predicted oil would peak in 1995, then abruptly go into decline.”

We’ve already established that he didn’t. You are tripping over your own lies.

“And yes, it is all about URR.”

Repeating that doesn’t make it true.

If you throw enough “capital and labor”, and energy, at conventional oil production you can always squeeze out a bit more a bit sooner than you would otherwise. It just means you get less later.

“the common doomer myth put forth that there are no alternatives to conventional oil”

Another lie. You’re not very good at this.

Okay, I think that’s enough. The above is for the benefit of anyone still reading who might have thought you have a serious position. We have established that you are a troll with no interest in facts. I will not be responding further. Make sure you waste plenty of time on composing a long reply. I will not be reading it.

Landbeyond on October 28, 2012 at 6:15 am

2035 is the current IEA prediction. You obviously don’t know this subject very well. As far as Hubbert’s predicitons – I have already posted links. And it’s not that I am a liar, its that you are a psycho doomsday nutjob. Go see a psychiatrist, please.

stopthesocialism on October 28, 2012 at 2:28 pm

I warned you I wouldn’t read it, and I haven’t. Pity it was just a few lines. Goodbye. Oh, and get a less stupid handle.

Come on, Colby, everyone knows that they are NOT fossil fuels. How many dinosaurs do you think there were? And how did they get down 20 thousand plus feet?

I have a chemist friend in his mid sixties that has been in the oil patch all around the world for over 40 years, and he says it is fairly well recognized in the industry that they are not fossil fuels.

The following charts show the gaps between where we would have been at the 2002 to 2005 rates of increase in production and net exports versus actual data for 2006 to 2011. Note that because of the nature of “Net Export Math,” on the upslope, net exports tend to increase faster than production. Of course, on the downslope this reverses, and we have seen measurable declines in Global and Available Net Exports (GNE & ANE), versus generally flat to slowly increasing measures of oil and liquids production. (ANE = GNE less Chindia’s net oil imports.)

One of the other implications of “Net Export Math,” is that the depletion rate, the rate that we use up remaining resources, tends to be quite high in the early stages of a net export decline period.

For example, the observed rate of change in the annual volume of GNE was -0.7%/year from 2005 to 2011, or an GNE decline rate of 0.7%/year. However, I estimate, based on the 2005 to 2011 data, that the rate of change in post-2005 Global CNE (Cumulative Net Exports) was about -4.1%/year, or a depletion rate of 4.1%/year in the estimated post-2005 cumulative supply of (net) exported oil. In other words, I estimate that the supply of post-2005 cumulative global net exports is declining at about six times the rate that the volume of GNE is falling.

The observed rate of change in the annual volume of ANE was -2.2%/year from 2005 to 2011, or an ANE decline rate of 2.2%/year. However, I estimate, based on the 2005 to 2011 data, that the rate of change in post-2005 Available CNE (Cumulative Net Exports) was about -11%/year, or a depletion rate of 11%/year in the estimated post-2005 cumulative supply of (net) exported oil that will be available to net oil importers other than China & India. In other words, I estimate that the supply of cumulative available net exports is declining at about fives times the rate that the volume of ANE is falling.

This article is a classic example of the hazzards of allowing mathematically and technologically ignorant journalists to pontificate on important scientific questions. As soon as rational discussion and debate ensues, Cosh can respond with nothing but purile smartassery. If he has actually read Hubbert’s work, he clearly didn’t understand it.
Any geologist or engineer is well aware that reserves of any naturally occurring commodity are a function of availability, price and extraction costs, and known reserves in situ therefore rise and fall with market conditions and technological capability. That doesn’t alter the inescapable fact that reserves of petroleum, natural gas, coal, copper or whatever are finite. At some point they will be “all used up”. Its foolish to suggest that we won’t run out of oil; the only question is when, and with the rapid modernization of China, it will probably be within the lifetimes of some people now living. Fortunately, uranium and thorium in low concentrations are very abundant elements – sufficiently abundant that, with improved technology, they could maintain civilization for centuries but, even that will have to end sometime.

Colby Cosh is described on Maclean’s website as “Maclean’s man in Edmonton [who] writes about everything.”

In this article, Colby has chosen to portray the Peak Oil (PO) phenomenon in the most restrictive manner, referring to it as Hubbert’s “law,” insisting the the curve be symmetrical (and contain a peak, not a plateau) and that the down-slope be “monotonically decreasing, as a mathematician would say.” Also, the volume of oil following the peak must equal the volume of oil which was extracted during the pre-peak phase.
Having established his own strict criteria for the PO model, Cosh then asserts that the model’s only utility and its very validity are determined by its “predictive power” (and even chides Hubbert’s “fans” for failing to acknowledge the “wiggle room” in his prediction of the Lower 48 peak).
Mr. Cosh apparently prides himself on being able to write about everything, but on a matter as serious as global oil supply, he really should have done some homework and then reflected on what he had learned.

He might then have discovered:
- the central value/usefulness of the PO concept is not in prediction, but rather in its insight that difficulties are likely to arise not when we ‘run out’ of oil but ironically as we ‘max out’ and are “awash in oil,” as Mr. Cosh correctly says we are. Like the Brits who peaked in 1999, we are likely to be blind-sided when we least expect it.

- Although mankind is enjoying unprecedented volumes of liquid fuels (global “all liquids” production is around 90 mbpd and still rising), what has occurred (largely unnoticed) is a stalling of global production of conventional, pumpable petroleum (ie. the stuff that Hubbert was worried about). Global production of conventional oil has been stuck at around 74 mbpd since late 2004 despite the incentive of sustained high prices.
- This may confirm an important point which Mr. Cosh claims (wrongly, I believe): that Hubbert was wrong because he failed to account for new production which would be spurred by higher prices. What seems to have occurred is that even triple-digit prices have been unsuccessful in bringing for more petroleum. What they have brought forth is what makes up the 16 mbpd gap between 74 and 90 mbpd: primarily natural gas liquids, followed by lesser volumes of oil sands, biofuels and shale oil (each contributing about 1.6 mbpd).

We are not seeing a “stalling” of conventional production. But rather, competition from alternatives. Of course in the fantasy world of the peak oil doomer, alternatives are not viable. Doom is a foregone conclusion.

Competition from alternatives? at $100/barrel?
More petroleum (the pumpable kind) is brought forth each year, but it barely keeps pace with depletion, hence our ongoing inability to go beyond 74-75 mbpd. Not only has the IEA finally acknowledged that conventional petroleum has almost certainly peaked, it projects a plateau at this level right through to 2035:http://www.energybulletin.net/stories/2010-11-11/iea-acknowledges-peak-oil

If current prices cannot bring forth more conventional oil, nothing will, which sort of affirms the point that Mr. Cosh says accused Hubbert of asserting (ie. that price would be irrelevant).
As for doomerism and fantasy, I’ve done my best to provide facts and to steer clear of both.

Mr. Cosh’s point that higher prices allow for more advanced oil recovery techniques is a valid one. Although higher prices won’t necessarily produce more “conventional” oil, as long as there are alternatives competing with conventional oil. Consumer demand is for energy products, regardless of what they are made of. This idea that high prices haven’t increased conventional oil production as proof of geological peak oil is absurd. What has been proved is that technology is making viable alternatives to conventional oil available in larger and larger quantities. The only real limit to oil production is the amount of capital and labor which can be applied to the process.http://www.youtube.com/watch?v=6v3w4eyXVWE

Thanks for the link to Mr. van Hulst’s presentation. He is a well-informed, sensible fellow and I agree with almost all of his points.
However, he failed to mention several relevant aspects:
- accelerating decline rates in existing fields, which keep offsetting production from the new, expensive oil that you & Mr. van Hulst refer to.
- declining net energy/EROEI.
- the increasing environmental risks which are inherent in pursuing arctic and ultra deep-water drilling, bitumen extraction, disposal of produced water, etc.
- export decline (diminishing capacity of oil producing nations to export).
- most significantly, the economic effects of “the end of cheap oil.” These are the aspects which have been thoughtfully explored by Feasta and by the team of German military analysts. The key point is that many aspects of our global economy (and especially the financial institutions which fund it) falter under the strains caused by expensive/unaffordable oil. Contrary to Mr. Cosh, price is at the heart of PO concerns… certainly not something which is ignored by credible PO analysts.

Your final sentence is nonsense. Certainly, investment is vital, but to dismiss geological realities and the finite nature of petroleum is silly. The economic and social strains which are caused by expensive oil are certainly capable of affecting the amount of capital which is available for exploration and development, without which we don’t get the next round of future supply.

Rick_Munroe on October 21, 2012 at 9:32 am

That’s the fallback argument for peak oil doomers – sure there’s oil, but it will cost so much, that the economy will collapse, or IS collapsing.

The simple facts of the matter are:
1. There are several hundred years worth of oil, and other fossil fuels available.
2. In addition to fossil fuels, there are many other methods of energy production available.

The only real question is – are humans smart enough to utilize these resources effectively? Doomers say no we’re not. It’s no accident that most peak oil doomers are on the left side of the political spectrum, because this is the left wing world view.

stopthesocialism on October 21, 2012 at 3:36 pm

So according to you it’s doom or ‘drill, baby drill’ is it? Just reading this thread there seems to be more intelligent analysis than that on this subject.

JanBC on October 21, 2012 at 4:20 pm

No. According to doomers it’s doom. According to me, it’s take your pick. E.g. solar energy is many thousand times more abundant than fossil fuels. Engineers all know that there are many ways to solve a problem. Doomers are not engineers.

stopthesocialism on October 21, 2012 at 5:11 pm

Who are these ‘doomers’?

JanBC on October 21, 2012 at 5:17 pm

Doomers are a collection of luddites, anticapitalists, and enviro-nazis. They mostly hang out on doomer blogs like “The Oil Drum” http://theoildrum.com/ chit chatting all day about TEOTWAKI, and when TSHTF. Their cult leaders are people like Colin Campbell, Matt Simmons, and Robert L Hirsch. They love to hear the various predictions of peak oil doom, and quickly purchase the latest books and tapes on the subject. And no matter how many times the various predictions fail, this does not shake their belief in the impending doom, and their acceptance of the latest predictions as fact. Here is an example of doomer nonsense talk from the late Matt Simmons: http://www.youtube.com/watch?v=zdFkv3OyEZk&feature=relmfu

stopthesocialism on October 21, 2012 at 7:13 pm

stoptheidiot, hey brother, there will be massive strife during the transition period. If you think that solar will be the magical solution that will replace 90million barrels of oil production per day, that will materialize out of thin air at the excat time when we need it.

You are sorely mistaken.

To use a quote from pak oil deniers. “The stone age didn’t end because we ran out of stones”

No in fact the stone age ended brutally, with massive wars and famine as mankind tried to grapple with booming population and energy issues.

Much like where we sit today ….

But hey, the utopia of solar energy (or was it cold fusion) is just around the corner!!

Peter Pottinger on November 13, 2012 at 2:55 pm

Nope, not just around the corner, here now. And cheaper than oil, or nuclear.
You keep praying for brutality, wars , and famine – that’s what doomers do.

stopthesocialism on November 16, 2012 at 1:20 am

To point # 1: There are centuries worth of oil but it will take a millennium to produce it all and that assumes the prices keeps going up exponentially like it has been.

Economies of scale can’t withstand increasing costs of a keystone resource and yes cheap crude oil is a keystone resource in the global economy.

Just because it is there doesn’t mean it can be produced economically.
When did you conservatives begin to think that markets are driven by magic? You people used to be really good at accounting level arithmetic.

UniverseWeAre on October 22, 2012 at 9:51 am

You’re right that there are hundreds of years worth of petroleum under US soil. The part you’re forgetting is price.

To produce all of the oil you’re talking about oil prices are going to have to keep going up as quickly as they have been for the last decade.

Cosh claims that energy in the future will be abundant and cheap.
Nothing about the remaining resources sounds cheap at all.
You said yourself that the oil coming online is due to higher prices.
The cheap stuff is gone.

UniverseWeAre on October 22, 2012 at 9:44 am

I just reviewed the 1956 paper. The man was a scientist not a forecaster. He just happened to mention a number that came true and subsequent folks have wasted much of our time predicting peaks. Hubbert said that if you ASSUME the ultimate recoverable in the USA is 150 billion the peak would be about 1965 and if you assumed 50 billion more that would retard a peak until about 1970. He was just demonstrating math. That one third more (150 –> 200) only buys 5 years. It just so happened that those were two generally accepted numbers for the recoverable oil in the USA at THAT TIME as shale was not yet listed as recoverable because the way the oil industry factors in economics is price and profitability cause a resource to be recoverable or not recoverable. Geologists didn’t use the words price and profitability they used recovery and recoverable. At the prices of the late 1950s shale was not profitable thus not listed as a recoverable Reserve.

Elsewhere in the same 1956 paper Hubbert reports the estimate of 2.5 Trillion barrels of oil from shale.
Word count in the 1956 paper: Forms of the words price or profit = 0; forms of recover = 13.

Wrong. Hubbert did make predictions. He predicted world oil production would peak in 1995 based on 2 trillion URR. He was wrong on both accounts. Also, there were processes available during his time to recover tar sands, heavy oil, and oil shale.

In the 1956 paper, Hubbert did make forecasts for oil, gas, and coal production. His forecast then was for world oil production to peak “about” the year 2000, based on his estimate of 1.25 trillion URR. Other erroneous estimates include 150 billion barrels URR for the US, 800 billion barrels total for Canadian oil sands and Venezuela heavy oil, and 410 trillion cubic feet of natural gas in the US.

Dear StopTheSocialism – When a scientist precedes a point with a stated assumption, in this case about total recoverable reserves, and that assumption proves false it does not make the logic false. The conclusion is false but it is due – at least – to the assumption. BTW – He states 2.5 Trillion for USA shale alone and when he discusses the year 2000 he states his assumptions about reserves and consumption.

His points are:
#1 – If you are consuming a finite resource and you continue consuming at such-and-such a rate you will use it all by some time and
#2 – he presents a model for his estimate of the time.

The reason his 1956 paper became famous (and him with it) was that few had expected a domestic peak that soon and when the USA did have a peak about that time (1970/1971) he got credited.

Unfortunately all sorts of focus was put on Peaks. Not a good focus – in my opinion.

We know that economics must be included, and inventions. So in reality prices will rise if/when production falls behind the demand curve. As prices rise people will make changes: alternatives will be developed/discovered, new methods of production invented, consumption will become more efficient etc. etc.

A good example of innovation is the Bakken shale drilling in North Dakota. A year or so ago it took 40 days from spud to completion of the drilling phase of a well. (Fracking comes later) Newer tools and methods can now do the same well in 20 days. Phenomenal. This means you may hear about fewer drilling rigs being active or more wells with the same rig count or some mix of the two factors.

There are other factors – politics is one. In the USA and Canada production is fairly straight from a business perspective but environmental rules and NIMBY issues slow things down. But this is cake compared to the rest of the world. Take Iran and Venezuela. Two misfit governments have so messed up those countries that oil production there is way down.

Well – that’s it for now.

JimBobMN on October 21, 2012 at 9:05 pm

Yeah if you read it carefully and then look at what really happened it is even scarier than initially assumed.

Hubbert was way low on how many barrels he expected to be extracted. He assumed that a larger resource would move the peak farther in the future.

Turns out the size of the resource doesn’t move the peak out nearly as much as his model would predict. That means his model was actually more conservative and we should be ringing the alarm bells even louder.

UniverseWeAre on October 22, 2012 at 9:39 am

I’m more concerned with peak space.
Any economy dependent on adding more people in order to function is what worries me.
Imagine us all living in cells the size of train bunks like in Hong Kong just so we can make more room for precious people.

Colby Cosh I know you are but what am I? Snarky dumbass. What are you twelve? Say something that shows you can have a discussion with the grown ups or take on a topic that is more appropriate to your pubescence.

Quess we “count” tar sands as “oil”. Friend, what you failed to consider is the energy rate of return. How much energy you need to produce the final product. Also, the cost of destruction to planet, just so we can stretch our addiction a little while longer instead of producing the next generation of energy. It did not surprise me that climate change was not even mentioned in the article. Best not to face the reality of global warming because that is another “cost” of burning fossil fuels we do not want to deal with and pass it down to our children.

EROEI is a doomer strawman. The argument goes something like this – once it takes a barrel of oil to produce a barrel of oil from tar sands – game over. It’s not worth it. The reality is that gas is used in the process, so it really doesn’t matter how much energy is used. What matters is the cost of the inputs vs. the value of the final product.

Global Warming (like Peak Oil) is another marxist boogeyman. The latest data from the CRU shows no warming for the past 16 years, despite the highest CO2 levels, and CO2 increases recorded.

Colby Cosh claims in his article that most “doomers” do not consider the economic aspects of oil production. When the concept of Energy Return on Energy Invested, a concept that is used by oil companies to assess economic benefit of an oil discovery you “so-called” realist claim foul. Hmm, why is it so hard to accept a few well placed facts.

Oh, stop it. They’re counting “all liquids”, including biofuels. A lot of it is expensive to produce, and when the high cost tips the country back into recession, “oil” production will fall because there won’t be a market for expensive oil. Economic growth is over.

How strange that there is no mention of EROEI – energy return on energy invested. That’s the prime factor of all future energy sources that we really need to keep an eye on. Of course there’s no mention of climate change and the methane carbon bomb either, so this article comes off as a bit of a siloed fluff piece.

“UBC researchers develop wireless recharging station for electric cars. The technology has been successfully tested on UBC service vehicles.”

These are the kinds of inventions governments can choose to sponsor to ensure they come onto the common market quickly and cheaply so that our dependance on fossil fuels is decreased. Unfortunately, HarperCons only sponsor oil and gas companies with subsidies and favourable legislation.

I really could give a crap if you are ignorant, stupid or simply trolling.

Everyone knows the truth about oil and its obvious what is happening just be looking at oil prices. No amount of rhetoric can influence the market to supply $5/gallon oil. Math and economics win, corporate shills lose.

My only question is. What advantage is there to writing these silly articles? I hope somebody is paying you A LOT of real $$$ to destroy your reputation and to be generally known, at best as a simpleton at worst a corporate shill, and a professional liar.

Today I was in a local coffee shop having a cup of java and happened upon this article in a dated copy of Mclean’s. Having spent the last 20 years researching resource depletion issues from both a scientific and economic perspective I was not surprised to view yet another great example of misinformation from an uninformed source.

It’s clear that Colby Cosh is a skilled and experienced writer. It’s also clear that Colby is less skilled at understanding scientific material and claims. Such is the problem with most journalists who attempt to write about resource depletion, climate change, or economic issues.

The sad fact is that most lay folk do not understand scientific material any better than Colby. Many folk are are easily swayed by these charismatic writers into accepting their half-truths about the nature of our world. It is not surprising to me that there is little political will to do anything about such issues as energy management or climate change when the vast majority of the public are confused about these facts due, in part, to the misinformation of a limited few untrained and unskilled journalists..

M.K.Hubbert was a Geo-Physicist trained in analyzing data and developing prediction models from geological records. Hubbert’s claim that the US would see a peak in oil production was made from a thorough evaluation of all “valid” oil discovery and production data available at the time. It is a common myth that the more data one gathers the better the prediction model. In fact, one requires the data to be valid and representative of the system under study to develop a precise model. Obtaining all of the data provides no assurance of a successful predictive model! Such was the case with Hubbert.

All claims in science are made using what is called a “confidence” interval. This is the region where the analyst expects to observe the average or expected value–no one can ever predict the exact value of anything in science. Given that Dr. Hubbert’s data was evaluated from a geological record developed over millions of years a confidence interval of 10-15 years is quite remarkable… Colby does a remarkable job of attempting to discredit a dead scientist who was the leading geological experimentalist for his time. Despite his credibility, M.K. Hubbert endured 10-15 years being ridiculed by his colleagues about his claims of the expected US domestic peak in oil production. Many of the claims and remarks made by Colby in this article were made by the oil colleagues and executives of Hubbert’s time. In the final analysis, Hubbert was right–in 1971 the US witnessed a peak in oil production that it has never recovered from since.

In 2005 Dr. K. S. Deffeyes conducted a comprehensive review of all of the world’s oil production records to revisit the question of world peak oil assessed by Hubbert in his final years. Dr. Deffeyes, a working colleague of Hubbert, determined the peak of oil production had already been achieved in 2005. Following not a Bell Shape curve, but rather a Logistic curve Deffeyes determined a clear an unambiguous answer to the question. The world has achieved that thing we are again debating, a peak in oil production!

Time is running out to take action to preserve this way of life for our children and our grand children. But, perhaps we can continue debating the issue for another 10 or 15 years using misinformation much as what was done in the 50s and 60s with Hubbert’s prediction… In the final call nature will decide our fate!

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